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Real estate open house: Doorway to trouble?

You may think you have nothing to lose by employing this traditional marketing tactic. But critics say that's not true -- and your agent has more to gain than you do.

By Marilyn Lewis Aug 1, 2013 11:36AM

For sale © Phillip Spears/Digital Vision/Getty ImagesNow that real estate has emerged from its coma and more would-be sellers are listing their homes for sale, it's worth asking whether a seller's open house, that traditional marketing technique of real estate agents, is worth the effort.


Open houses are more effective at marketing real estate agents than they are at selling homes, critics say. They also present an opening for thieves who pretend to be homebuyers but in fact are there to steal the owner's belongings or to case the joint with the idea of returning later.

For buyers, searching for a home has changed with the Internet. That would seem too obvious to bother pointing out except that the numbers are so interesting. A National Association of Realtors 2012 survey of homebuyers and sellers found that:

  • In 2003, 16% of homebuyers surveyed found their new home through a yard sign or open house (the survey did not distinguish).
  • In 2012, just 10% found their home through a yard sign or open house ("The Internet has edged out all other sources in the process," the report says").
  • Most (41%) buyers today go online first to learn about homes for sale.
  • Just 3% turn first to an open house to learn about properties for sale.

In defense of open houses

Despite this shrinking effectiveness of the open house as a marketing tool, 55% of sellers surveyed said they'd used one. And, as NAR spokesman Walt Molony points out in an email, 45% of buyers -- even more than in the late '90s -- do attend them.


"Not well understood is the fact that open houses also are attended by real estate agents, where they learn firsthand about properties that may be of interest to their buyer clients. So while a buyer may not have first learned about the home they purchased through an open house, their real estate agent may have," Molony says.


In the experience of Seattle broker Ray Akers, though, open houses are "a waste of time."


"No one has ever walked in and said, 'I love it. Where do I sign?'" he says. "People walk onto a car lot and buy a car. People don't do that with houses."


Agents typically advise their sellers to lock up or remove valuables and prescriptions, but Akers still worries about thieves who lift unsecured items from the home or who visit to learn the layout and vulnerabilities so they can make a return visit later.


Thieves worked an open house

"I don't think it's wise to have an open house in an occupied house," Akers says, talking by phone. He recalls staffing an open house once when a couple distracted him while, he later learned, their associate rifled through drawers in another room. Fortunately, the home was vacant.


"The following day it was reported that several open houses were hit by the threesome. Had my open house been an occupied home, they could have walked out with valuables, prescription medicine, or my client's I.D," Akers says.

To sellers, an open house is a sign that the agent is actively marketing their home, but real estate attorney Doug Miller, the executive director of the nonprofit Consumer Advocates in American Real Estate, sees open houses as useful mainly to the agents, as a way of meeting potential clients, from neighbors who might want to list a home to buyers interested in viewing additional properties. Interviewed by phone, he said he favors broker open houses instead, where invited agents tour homes without their clients.

"We think it's wrong to displace a seller from their home, to have them put it in showing order just so the Realtor can use their house as a platform for their own purposes" he says.


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Aug 1, 2013 1:28PM
I was a Broker over 20 years now retired, my advice about open houses --- don't, only possible exception is if the place is vacant, even then you run lots of risk for liability when somebody's kids are horsing around and one pushes the other thru your sliding glass door or some "accidentally" falls down the stairs, you are liable not the agent. lots of tire kickers, nosey neighbors, people up to no good and people with nothing else to do on a Sunday afternoon. Anyone who is serious will want to see it without interruption of twenty other people. Don't agree to open house, and also be very leery to allow a "lockbox", I would not on our current house, without it the house sold in 61 days. If the agent knows how to market the property and does so diligently and thoroughly (and you price it right) it will move, you should insist your agent be there if you are not as their job is to represent & look out for you. you don't need open houses any more than you need a toothache.
Aug 2, 2013 10:08AM
Agents can use an open house to pick up new clients who might buy another house that's more suited to them or favorably priced.
In the industry,  it's an open secret that you don't sell the house you have open.  You have that open house to placate a seller.  You DO use the opportunity to sell something else,  though.
Usually an agent gets to show the curious neighbors the interior and maybe develop a relationship that leads to a listing in the future,  as well.

Aug 3, 2013 12:14PM

Just ran an Open House last weekend and the Offer showed up the next day from the Buyer Rep of one of my Open House visitors.  I have heard the negative arguments for years against doing Open Houses and can't understand why Sales Representatives refuse to do them.  I have had so much success over the years selling one in five of my listings on average this way.  My Sellers are fully-versed in the pros and cons of holding their homes Open and they welcome the opportunity to have me do it.  The Seller states that they have full liability insurance on the property and indemnifies the Brokerage (and Sales Representative) form harm in Clause 8 of the OREA Seller Representative Agreement.  I can't help but think, wherever I hear this old knock on Open Houses that the Sales Representative is just too lazy to do one.


Don't ignore the Open House.  It's one of the Marketing Tools we provide for the Home Owner that works.  And we can do them better than a FSBO.

Oct 27, 2013 9:08PM

This article is correct! However, an open house can still be beneficial and safe if strategically planned. A Real Estate agent can do a broker's open by sending an invitation to licensed realtors only and requesting an R.S.V.P. prior to event. Then, at time of event, document all attendees by requesting proof of ID/License and Agent's business card. Yes, a well priced property will not last 2 days on the market regardless of what agent you choose... "WE ALL HAVE ACCESS TO SAME DATA & TECHNOLOGIES" ... However, many times, going the extra mile with the Marketing (an open house is a form of marketing) a well planned open house is needed for a hard to sell, High-End/Luxury or more expensive property.

Sep 3, 2013 4:12PM
An open house can cause allot of confusion, in this era of high tech virtual tours and such this may be something quickly to fade into the past, so take a new solid approach and make sure you have completed some solid research to base your chosen actions upon.

Property By Owner List

Aug 1, 2013 12:25PM
I guess my wife and I roll old school.  We were headed home with our realtor after visiting a couple houses we'd arranged to see in advance when we just happened to pass an open house.  We stepped in, got the lay of the land, and within two days decided it was right for us.  I guess I'm encouraging agents and sellers to put themselves in a risky position, but, well, it worked for us!
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